Earlier I took a look at the obvious impact that the pig pig flu outbreak could have on airlines, but I was surprised to see the profound impact it has had in the oil patch.

Black gold futures are 5% lower this morning because of global economic recovery concerns that have surfaced thanks to the "deadly swine flu." In early morning trading, June-dated crude was trading below $50 per barrel and recently dipped below $49 per barrel.

Citigroup (NYSE: C) is recently trading at $3.42 in pre-open trading, above its close of $3.08. C plans to seek shareholder approval to both increase the number of shares outstanding and undertake a reverse stock split as part of the company's effort to exchange common stock fro preferred securities. C announced on February 27 "Citi will offer to exchange common stock for up to $27.5 billion of its existing preferred securities and trust preferred securities at a conversion price of $3.25 a share. The U.S. government will match this exchange up to a maximum of $25 billion face value of its preferred stock at the same conversion price." C March 4 straddle closed at $1.19, April 4 straddle is priced at $1.06, June 4 straddle is priced at $2.60 according to Track Data, suggesting large price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

From September to early November, the volatility was staggering, and if you were on the side of the major trend (down), you've made money. But now traders are grumbling that there just isn't enough volatility to make trading profitable.

On Friday, Standard & Poor's reported that in the past 22 days, the S&P 500 has remained between 805 and 874, or within an 8% range. But during the past 12 days, the closing price range for the "500" has been only about 50 points.

The evidence is growing that a major rally is about to get underway and the possibility that a major bottom has been made is increasing.

The bases for the Dow at 7,900 to 8,000 and S&P 500 at 800 to 820 have not only held fast, but new buy signals from a variety of indicators are virtually telegraphing that the market is better situated for a rally than at any time since November.

And there are some interesting similarities to the bear market bottom of 2002-2003: The sideways pattern that began in early October is now more than four months old. And an argument could be made that the consolidation that marked the bottom of the last bear market was extended to seven months only by the Sept. 11 catastrophe, which hit smack in the middle of the consolidation.

On Thursday, stocks fell 4.3% shortly after the opening, then rallied back to break-even on Apple's (NASDAQ: AAPL) earnings only to be crushed before the close on lousy earnings by Microsoft (NASDAQ: MSFT).

It's this kind of extreme volatility that sends money managers to Clancy's Bar, since it gives few hints as to the market's true direction.

Contrary signals are everywhere.

The bulls point to a tenacious support at S&P 500 (SPX) 800 to 820; an oversold stochastic, which almost gave a buy signal on Wednesday; grossly oversold internal indicators yesterday; and high fear numbers by the Association of American Investors (AAII) and others.

But the bears say that a breakdown is almost upon us and point to the higher CBOE Volatility Index (VIX), a foreboding series of charts, and a world banking crisis that seems to have no end.

So, what's an investor to do?

One of the first things that I did was to redraw the support line at S&P 820 to reflect the lows at 804 on Tuesday and Wednesday. This results in a broader major support zone at SPX 800 to 820. A break of that zone would probably result in an immediate test of the closing low of 752.

At 752, we could hold again by forming a double-bottom and a volatile sideways market for the rest of this year.

But if S&P 750 is crushed on high volume, look out below, since there is little support before 620-650.

Sam Collins is a contributor to OptionsZone.com.

A former senior manager at CB Richard Ellis Group (NYSE: CBG) in Southern California, now a partner at a private real estate company where I am an investor said to me this week that the stock market was just "white collar gambling".

This is a relatively common thought from Main Street and when my colleague Ron, made the comment it was hard to argue that it is not.

It certainly looks like gambling when you consider how momentum day traders place their bets, or options traders, or commodities traders -- and the past few years -- CEO's of major corporations.

I certainly was playing this theme up when I posted The great leadership disconnect: I bet the farm and you lose in September.

Earlier in the week Ron had brought up the fact that CBG stock had dropped from over $40 per share to under $4 and it seemed like it was bound to get back sometime in the foreseeable future for a huge gain. The following is the three year chart.

Ron is a smart real estate guy but he is not a stock market aficionado. He believed the risk / reward opportunity seemed like a no brain-er (not that he was going to invest). The first problem is that idea of the foreseeable future. I think the market is not foreseeing much lately. Most things seem quite cloudy indeed.

Actually I could not help but ponder the matter because, coincidentally, I was at a business breakfast the following morning where the speaker was a manager with responsibility for CBG's Asian portfolio investments. When Ron brought up the subject originally I responded that I did not follow the stock, but that it did not have to return to it's previous glory to achieve a great return on investment. Suppose it took two years to go from $4 per share to $6 or $7. Most anyone would be delighted with a 25%+ annualized return.

As it turned out, I saw my associate later that day and he pointed out that CBG had jumped 40% from the day before. WOW, some of the day gamblers, I mean traders, must have made a killing. Of course that is only if they were on the right side of the deal, and sold in time.

CBG closed Friday at $4.84, down 10% and has been volatile lately as the chart and the stocks recent moves indicate. It has a beta of just under 2 which means that it moves at twice the rate of the broader market.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own any shares of CBG. I do not do any day trading.

In this market, it bears repeating that a great deal can change in a short time.

That's why from an investor standpoint, the Dow's level really doesn't count until 4 p.m. ET.

Of course, traders will quickly point out that intra-day and hourly overbought/oversold indicators certainly count, and if you're in that category of market participants who trade daily with success, congrats.

But for the bulk of investors/readers a longer time horizon is relevant, and that's why it's not prudent to read too much into the Dow's level before the 4 p.m. close.

With the VIX, the Chicago Board Options Exchange Volatility Index (NYSE: $VIX.X), the benchmark index for U.S. stock options, at record highs, the stock market is displaying near-unprecedented volatility - - or wild gyrations characteristic of periods permeated with fear, uncertainty, and announcements events that change economic forecasts, almost daily.

Typically trading between 15-30, the VIX has been above 40 for about a month, and has traded above 80! On Thursday at 11 a.m., the VIX was at 66.38, down 3.58.

And the VIX's expression in Dow terms? That's right: massive swings in the Dow -- 500-point reversal moves intra-day, 700-point up days followed by 800-point down days, other wild swings, 5% up days in a 10% down month, and of course, the old ulcer-generator -- massive selling at 3 p.m. ET.

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

In light of the short-selling ban, someone recently asked me for my opinion about short selling. Personally, I'm grudgingly accepting of the practice, but I believe that some serious changes need to be made. I believe that the practice of short selling should be made harder to engage in, more expensive to execute, limited in duration, and heavily scrutinized.

The uptick rule is fine, and it never should have been suspended, but I feel that it falls short of the mark. Bear raids can still be orchestrated in spite of uptick only buys. Purchasing on the uptick simply slows the process a little. A system must be developed by which the practice of bear raids is effectively terminated.

When I researched opinions and viewpoints on short selling, it became quite apparent that the writers I had encountered were not supporting short selling nearly as much as they were simply railing against a short-selling ban. Not one person actually made a case for why the practice is essential to market health. The closest I came to finding an eloquent argument in favor of short selling was an article by Paul R. LaMonica, editor at large, CNNMoney.com. Though Mr. LaMonica didn't really explain to me why I should be shorting stocks to benefit the markets, he did quote the SEC on 3.5 reasons why shorting might be beneficial.

Minyanville Professor Adam Warner dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit www.minyanville.com.

MAJOR PAPERS:

• UBS AG (NYSE: UBS) won't comment on write-down estimates, but according to the Wall Street Journal, investors are expecting it as prices for mortgage securities have significantly gotten worse over the past several weeks as evidenced by Lehman Brothers Holdings Inc (NYSE: LEH) profit warnings.
• Yesterday Lehman's stock fell 8.7% as the firm announced a projected $2.8B second quarter loss and a $6B capital raise. Options activity indicated a lessening volatility, the Wall Street Journal reported, a sign that perhaps the worst may be over.
• According to a person familiar with the matter, the Financial Times reported that China's Qingdao Haier has approached investment banks to advise it on a bid for General Electric Company's (NYSE: GE) appliance business.

OTHER PAPERS:

• A brief filed by plaintiffs in a shareholder lawsuit against Yahoo! Inc (NASDAQ: YHOO) and its directors claimed that an employee severance plan put in place to protect workers after a merger with Microsoft Corporation (NASDAQ: MSFT) should be repealed immediately. The New York Times reported that the plaintiffs believe the plan could skew the outcome of a proxy battle between Yahoo! and Carl Icahn for control of the company.

If you're like most people, you probably have a larger percentage of your investment money in cash than you had two years ago. While some investors are taking their chances in this recent market volatility, many are choosing to wait on the sidelines until the "All Clear!" call comes in (whenever and however that's really communicated -- but that's another blog post).

Well, these investors sitting on cash are not alone. Bloomberg reports this morning that mutual funds have been desperately selling stocks and moving to pretty sizable cash hordes. In a survey conducted by Merrill Lynch and reported by Bloomberg, managers have been feverishly adding to their cash positions and consequently, "cash relative to total assets also rose to a five-year high as managers found fewer stocks to purchase and anticipated redemptions."

This brings up a couple of issues. Let's be clear: mutual fund managers want to manage volatility like all investors. The problem here is that if I hand my money over to a small cap manager because I believe he's pretty proficient in picking stocks, I don't really want him moving into cash. That's my job as portfolio manager of my own investment account. I'm essentially paying him to be in the market -- not move out of it.

Is the stock market more volatile than in the past? Many investors believe so based on the sharp intraday swings of recent days.

However, it really comes down to how you define volatility. If you look at the median monthly high-low ranges (in percent) for the S&P 500 index going back to 1980, and compare those averages to this year's values, only one month stands out so far.

In January, the range between the high and low was 13.70% (of the average of those two numbers), almost double the 7.60% monthly median going back 28 years.

The high-low range for this year's first month also topped previous highs of 13.09% in January 1987 and 12.62% in January 1980.

Microsoft (NASDAQ: MSFT) is expected to report Q2 EPS of 46 cents today after the close, according to Thomson First Call.

MSFT February 35 calls have traded 2,307 times on transaction volume of 78,487 contracts, above its open interest of 53,988 contracts. MSFT call option volume of 188,804 contracts compares to put volume of 68,324 contracts. MSFT February option implied volatility of 46 is above its 26-week average of 26 according to Track Data, suggesting larger risk.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Sunoco (NYSE: SUN), a petroleum refiner & marketer, is recently up 33 cents to $72.77.

WTI crude futures are up 3.51% to $99.35. Soleil says, "We maintain our positive outlook for the stock, expecting SUN to unlock some of value of the company via strategic actions in 2008. We reiterate our Buy rating and $94/share price target."

SUN overall option implied volatility of 36 is near its 26-week average of according to Track Data, suggesting non-directional price risks.

Volatility Index S&P 500 up 1.30 to 23.63.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Gap Stores (NYSE: GPS) is expected to report EPS on November 21. GPS December option implied volatility of 41 is above its 26-week average of 32 according to Track Data, suggesting larger price risk.

Williams-Sonoma (NYSE: WSM), a home-furnishings retailer, is expected to report Q3 EPS of 24 cents on November 15. RBCM says, "Macros very difficult; too soon for longs, but scarcity value could increase." WSM November 30 straddle is priced at $2.80. WSM December option implied volatility of 55 is above its 26-week average of 38 according to Track Data, suggesting larger price fluctuations.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.